The Golden Age of Electronics Manufacturing

Posted by on Nov 23, 2017 in Campaigns | No Comments

Dozens of large companies from the United States, Japan and Europe came to Singapore in the 1970s and ’80s to set up manufacturing facilities. As a result, they created thousands of jobs and invested millions of dollars in the local economy, driving Singapore’s nascent manufacturing sector. One Singaporean, Tan Boon Hock, recalls his experience working in the American company AT&T in the 1980s and ‘90s.

They came by the busloads from across the border — hundreds of eager Malaysian workers who would make a beeline towards the brand new manufacturing plant of American telecoms giant AT&T Consumer Products in Kampong Ubi in Singapore.

The influx of these workers to his company’s factory was a daily sight for Mr Tan Boon Hock back in the 1980s, who was then working for the American company.

“These workers were crucial to us in manufacturing as the pool of local production operators was insufficient. Without these workers, we wouldn’t have been able to ramp up our capacity to keep pace with the demand for our products,” said Mr Tan.

One of the main pillars of the Singapore economy is manufacturing. Singapore currently manufactures high value products such as semi-conductor chips, oil rigs, pharmaceutical drugs and oil and chemical products.

But nearly 30 years ago, electronics manufacturing was a booming business in Singapore. Some of the largest and most well-known companies around the world set up shop in Singapore, lured by financial incentives, relatively cheap labour and political stability. These included big names such as Philips, Hewlett-Packard, Mitsubishi, Texas Instruments, Fairchild Semiconductor and General Electric. As the industry grew, so did the opportunities for Singaporeans and many locals got their first taste of working in global multinational companies. Mr Tan joined AT&T as an engineering manager in the 1980s as one of its first employees.

“As an engineer, I naturally gravitated towards Western multinationals as they represented leading-edge technology and management systems. Getting hired by AT&T was like a dream come true,” he said.

Mr Tan impressed his American bosses with his work attitude and soon was given the opportunity to prove his leadership skills.

He undertook a major project solving serious productivity and quality issues that had cropped up in a factory whose engineering director had completed his assignment and had returned to the US. People thought he was crazy to take on the role of problem fixer for the company.

But Mr Tan, then in his mid-thirties, was undeterred. Keen to prove himself, he approached AT&T’s managing director in Singapore Mr Walter Orth Jr. for the chance to fix the problems.

Mr Tan Boon Hock (right) with his boss AT&T Singapore managing director Mr Walter Orth Jr (left). Image Source: Mr Tan Boon Hock

“Some colleagues were quite alarmed at my rashness and told me that I was heading towards disaster. But I succeeded and six months later, the factory was humming again,” he said.

Mr Tan was also posted to Batam to set up a satellite factory to complement AT&T’s presence in Singapore. Despite the frequent travel that was associated with the posting, Mr Tan decided that it was too good an opportunity to pass up.

“The company’s second managing director Jeff Inselmann asked me if I should have a word with my family before saying yes to taking on the job in Batam. I said that there was no need to as Batam was just across the pond. It was a rare opportunity for me to prove myself,” said Mr Tan.

“I approached several colleagues to join me. But to my surprise, many turned down the offer as it was out of their comfort zone. Luckily, I managed to assemble a team of gung-ho colleagues.”

The team went to Batam and soon got the new factory up and running.

The pioneer batch of Singaporean employees in the company also delivered results when given the chance to shine, showing that they were world class workers, said Mr Tan with pride.

For instance, they won over their American bosses when the first corded telephones rolled off the production lines within three months of setting up.

“Our bosses were impressed that the Singapore plant was able to fulfill the orders from all the big US retailers,” he said with a grin.

“In fact, the Singapore operations achieved higher productivity and quality compared to the Shreveport Works in Louisiana, home of AT&T’s residential phones manufacturing.”

The string of successes in completing these projects allowed him to climb up the corporate ladder quickly, first as the company’s director of engineering and later as the managing director of AT&T’s Consumer Products Asia-Pacific manufacturing operations.

The success of the manufacturing plant in Singapore soon started to spawn more offshoring activities, with plants set up in Thailand and Batam.

But the technology to make the phones was not difficult to replicate. Soon entrepreneurs in Taiwan, South Korea and China started to set up businesses to manufacture and even design residential phones for the US market, competing directly with AT&T.

Initially, their quality and efficiency were poor compared to AT&T’s.  But within four to five years, they made quantum leaps in productivity. Soon, they were churning out sleeker and higher quality phones and surpassing AT&T in cost competitiveness, said Mr Tan.

Mr Tan, top left, poses with his colleagues from AT&T in the late 1980s. Image Source: Mr Tan Boon Hock

“It was a moment of truth at the headquarters in New Jersey. Small Asian businesses were besting AT&T in manufacturing and design of phones.”

That spelt trouble for the company in Singapore and soon it was clear that the manufacturing plant was unsustainable. By the late 1990s, AT&T decided to shutter all their factories in Asia and elsewhere.

“Hundreds of employees at all levels were let go.  It was an emotional and sad experience for colleagues who had known each other for so many years to bid each other farewell,” he said.

“My colleagues and I were worried about what the future would hold when the company shut down. For me, it had been my job for the last 11 years and I was unclear of what my next career move would be.”

He eventually left the company and started his own consultancy, Lead Associates, specialising in leadership training.

Mr Tan believes that there is no other way to cope with change than to always remain adaptable. Image Source: Mr Tan Boon Hock

His career taught him one lesson: Change is inevitable and everyone will have to learn to adapt.

“Many jobs will become obsolete as technologies such as artificial intelligence and robotics become more advanced,” he said.

“We need to reinvent ourselves again and again.”

 

Written by: Amelia Tan

This blogpost is part of the Red Dot Stories campaign

 

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